Off-price tag retail pioneer Century 21 Outlets filed for personal bankruptcy on Thursday with a system to near all its shops, citing the refusal of its insurers to include its losses from the coronavirus pandemic.
The liquidation of Century 21’s assets as a result of the Chapter eleven personal bankruptcy process would finish a run of almost sixty a long time for a business enterprise that was launched by the Gindi household in Bay Ridge, Brooklyn, in 1961.
The corporation, which has 13 shops mainly in New York City and the surrounding metropolitan area, created roughly $747 million of profits in fiscal 2019 but, like other merchants, experienced been strike difficult by the pandemic, which compelled it in mid-March to near all its spots.
Even with shops possessing reopened, Century 21 said it could no for a longer period continue to be in business enterprise since its insurers “have turned their backs on us at this most critical time,” declining to provide the $one hundred seventy five million it was searching for in protection for business enterprise disruption losses resulting from the pandemic.
“We are self-assured that experienced we obtained any meaningful part of the insurance coverage proceeds, we would have been able to preserve 1000’s of employment and weather conditions the storm,” co-CEO Raymond Gindi said in a news release.
Century 21 sued its insurers in July but CFO Norman Veit said the corporation experienced to file personal bankruptcy in component to reduce its landlords from pursuing eviction proceedings to judgment and/or seizing its inventory to satisfy rents thanks.
“The debtors believe that [the personal bankruptcy] court can provide an expedited resolution of the insurance coverage motion that will generate important proceeds and certainty for the debtors and their estates,” he said in a court declaration.
As New York Magazine reviews, Century 21 was famed as “a price cut mecca: a treasure trove where by, if you ended up ready to invest several hours digging (and maybe get into a battle), you could come across a holy-grail luxury item at some thing like 99.99 percent off.”
But even in advance of the pandemic, Veit said, it experienced been adversely affected by “the shifting of revenue from classic brick-and-mortar merchants to on the web merchants, and switching client preferences.”